The other Beatles liked the idea for the show, and made plans to produce and direct it themselves. After they stopped giving concerts in 1966, they had started making their own promotional films (called "promos"), much like today's music videos. They had success with promos, and wanted to try making a whole programme, to appear on television during the Christmas holidays.

Beatles manager Brian Epstein helped set up the production, and the Beatles asked friends, members of their staff, and some professional actors to ride with them in a rented bus over a holiday weekend, and film whatever happened, with magical elements to be added later. Making the movie was one of the first jobs of the Beatles's new company, Apple Corps.

Epstein unfortunately died before filming began. Without him to look over business details, things ran into trouble. By the time things were set up, John Lennon and George Harrison had changed their minds about performing, and spent much of the bus trip asleep. There also was not much for scenery along the roads, or entertainment among the passengers.

What turned into a bigger event than filming Magical Mystery Tour was the entourage that began to surround the bus, wondering what the "tour" was all about. People followed the bus for miles, and caused traffic jams. People who saw the bus go by expected a "happening" of some kind, but none had been planned. In trying to be spontaneous, nobody had worked out a destination for the bus, or the trip. Most of the commotion ended after Lennon personally removed the MAGICAL MYSTERY TOUR lettering from the sides of the bus. Later a Beatles assistant said the traffic jams should have also been filmed.

Spots for songs and performances were included in Magical Mystery Tour, and so was a storyline explaining what the trip was about. The songs featured in the show included "The Fool on the Hill", "I Am The Walrus", "Blue Jay Way", an instrumental song, "Flying", and "Your Mother Should Know", with a choreographeddance sequence. Another band, the Bonzo Dog Doo-Dah Band, played live during a striptease performance.

Magical Mystery Tour appeared on British television on Boxing Day in 1967, and was a surprising flop. Part of the reason for its failure was because it was shown in black-and-white, while colour was an important feature. Another part was because most of the viewers did not understand what was supposed to be happening. Another part was that not much had happened on camera, for long parts of the programme, and it showed.

Ringo Starr made a personal appeal to the BBC to show Magical Mystery Tour again, in full colour. The BBC gave it a second broadcast, but it did not change opinions. ABC in the United States cancelled plans to show Magical Mystery Tour in America. (It later appeared as a "midnight movie", shown in small cinemas and on college campuses.)

Even though Magical Mystery Tour was not a television success, its soundtrack still sold well. The show's songs were released as a double EP in England, with a storybook and pictures from the show. In America, Capitol Records added songs from recent Beatles singles to the show songs, and released a whole album. The American version outsold the EP in England, and in 1977 Parlophone Records released a British version of the album.